Calgary-based Husky Energy on Wednesday agreed to purchase a package of natural gas properties in west central Alberta that would nearly double the company's land base in the region and extend the use of its Ram River Gas Plant.
The Ram River Plant and its extensive infrastructure of gathering pipelines, transmission systems and rail lines, provide a strategic base for natural gas exploration and development. The region is an active exploration and production area for other producers and the plant provides additional revenue-generating opportunities by processing third-party natural gas.
The acquisition, expected to close with an unnamed party in the next two months, would add more than 65 MMcf/d to Husky's production base and contribute 37,000 boe of proven reserves and 11,700 boe of probable reserves. No financial details were disclosed.
"As part of our heightened focus on growing near-term production, Husky has initiated a strategy to accelerate near-term production opportunities and to leverage our balance sheet capability in order to make acquisitions that fit with our business competence," said CEO Asim Ghosh. "This agreement represents an important step in executing that strategy."
The Ram River region in Alberta's Foothills is a core gas producing area for Husky, where it currently produces 50 MMcf/d. The acquisition would add 160,000 acres of land to the company's holdings, including 122,000 undeveloped acres, nearly doubling Husky's current land holdings in the region.
The Ram River Gas Plant processes a "significant" portion of the production that is being acquired, and over a five-year period, further production from the acquired properties would be integrated into the plant, according to the company.
"This is an important acquisition that adds to our natural gas production and reserves in an area where we have significant gas gathering and processing infrastructure," said Ghosh.
©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.